Taking out a loan as a couple is a common practice, whether to finance a property project, buy a car or simply manage day-to-day expenses. However, behind this harmless act lies a legal complexity that is often misunderstood. The rules that determine who must repay the debt vary considerably depending on the nature of your relationship: cohabitation, civil partnership or marriage. Misunderstanding these mechanisms can have serious financial consequences, particularly in the event of separation or payment difficulties. The aim of this article is to give you a clear overview of the principles governing the repayment of loans between couples. As each situation is unique, we will guide you towards more detailed analyses of the points that concern you directly. For appropriate legal advice to your case, our firm is at your disposal.
What is consumer credit for couples?
Consumer credit is a contract whereby a professional, usually a bank, makes a sum of money available to an individual. The borrower undertakes to repay the money over a set period, plus interest, which is the lender's remuneration. This type of credit is governed by the Consumer Code to protect the borrower, who is considered to be the weaker party to the contract.
For a long time, the loan of money was seen as a "real" contract, meaning that it was not definitively formed until the funds were actually handed over. Today, case law has evolved. A loan granted by a credit professional is a "consensual" contract. In practical terms, this means that the agreement of the parties is sufficient to form the contract. If the bank has given you its agreement but then refuses to pay out the funds, it can be forced to do so by a judge. The basic obligations remain simple: the lender must deliver the funds and the borrower must repay them according to the agreed repayment schedule.
Cohabitation and PACS: what kind of solidarity when it comes to credit?
But what happens if the couple are not married? The situation differs radically between cohabitation and a civil solidarity pact (PACS).
For cohabitees, the principle is one of strict separation of assets and debts. There is no legal requirement for either partner to be jointly liable for debts contracted by the other, even if they are used to meet household needs. Each partner is therefore only obliged to repay the loans he or she has personally taken out. However, it is possible to provide for joint and several liability by means of an express clause in the loan contract. If both cohabitees sign the contract as joint borrowers, they are jointly and severally liable for repayment.
For PACS partners, the law introduces joint and several liability for debts contracted for the "needs of everyday life", as set out in article 515-4 of the Civil Code. However, this solidarity does not apply to loans, unless they meet very specific conditions: either the consent of both partners has been obtained, or the loan is for modest sums needed for day-to-day living. For a detailed analysis of these situations, please see our article on rules specific to cohabitation and civil union.
Marriage: primary regime and household credit debts
For married couples, the law establishes a first level of protection and obligations that apply regardless of their matrimonial property regime: this is the "primary regime". At the heart of this system is article 220 of the Civil Code, which establishes the principle of joint and several liability of spouses for household debts. This means that any debt incurred by one spouse for the upkeep of the household or the education of the children is binding on the other.
However, the case of loans is special. Solidarity is excluded, except in two well-defined situations. Either the loan was taken out with the consent of both spouses, or it involves modest sums that are necessary for day-to-day living. The concept of a "modest sum" is assessed by judges on a case-by-case basis, depending on the household's lifestyle. This legal solidarity continues as long as the marriage has not been dissolved and the formalities for registration of the divorce have not been completed. To understand all the subtleties of this mechanism, you can read our article on article 220 of the Civil Code.
Credit and matrimonial property regimes: an overview of specific features
Beyond the primary regime, the matrimonial regime chosen by the spouses has a direct impact on the fate of credit debts. Two concepts need to be distinguished here: obligation to the debt (who can be seized by the creditor?) and contribution to the debt (between spouses, who must bear the final cost?). Here is an overview of the three main systems.
Article 1415 of the Civil Code is central to the system of community of acquests, the default legal system. It provides that a loan taken out by only one spouse, without the express consent of the other, commits only his or her own property and income. The community, i.e. the joint estate, is thus protected. To find out more about this technical point, see our analysis of article 1415 of the civil code.
The community of property regime pools all the assets of the spouses. You might think that all debts would also be common. However, case law has extended the application of article 1415 to this regime, reinforcing the protection of the joint patrimony against a loan taken out by only one spouse.
Finally, the regime of separation as to property establishes a separation of assets. Each spouse remains solely liable for debts incurred before or during the marriage. The notable exception is the joint and several liability for household debts under article 220.
Joint accounts and seizures: preventing the risks
Although joint accounts are practical for day-to-day management, they also present risks when it comes to credit debts. Can a creditor seize the entire balance of a joint account for a debt that only concerns one of the account holders? Once again, the answer depends on the status of the couple and the matrimonial property regime.
The general rule is that the creditor can only seize funds that actually belong to the debtor. Under a joint property regime, the sums in the joint account are presumed to be common, but the creditor often has to prove that the funds actually come from the income of the debtor spouse in order to be able to seize them in full, which can be complex. Under the regime of separation as to property, the funds are presumed to belong equally to each spouse, and the creditor must prove the contrary in order to seize more than half of the balance. To better understand the subtleties of these operations, we recommend that you see our full analysis of the risks associated with joint accounts and seizures.
Taking out a consumer credit loan is an important decision, with far from neutral legal implications for the couple. Each situation, whether cohabiting, under a civil partnership (pacs) or married under a specific regime, is governed by different rules. To secure your situation and anticipate any potential difficulties, it's essential to be well informed. For an in-depth analysis of your situation and tailored advice, get in touch with our firm.
Frequently asked questions
Who has to repay a loan taken out by just one spouse?
In principle, only the spouse who has taken out the credit is liable to repay it from his or her own assets and income. However, the other spouse may be jointly and severally liable if the credit is a modest and necessary household debt, or if he or she has expressly agreed to it.
Are cohabitees automatically liable for each other's debts?
No. There is no legal joint liability for debts between cohabitees. They are each liable only for the loans they have taken out, unless they signed the contract together as joint borrowers.
What are the main rules for credit under a civil partnership?
PACS partners are jointly liable for everyday debts. In the case of loans, this solidarity only applies if both partners have consented to the loan or if the sums involved are modest for day-to-day needs.
Can my salary be garnished for a debt owed by my spouse?
Under the joint property regime, a spouse's salary is in principle protected from his or her spouse's creditors. It can only be seized if the debt is a joint and several household debt within the meaning of article 220 of the Civil Code.
Does a joint account mean that debts are shared 50/50?
No, not necessarily. Ownership of the funds in a joint account and the ability of a creditor to seize them depend on the matrimonial property regime and the origin of the debt, not just the fact that the account is joint.
What happens to credit taken out jointly after a divorce?
Both ex-spouses remain joint borrowers vis-à-vis the bank, even after the divorce. The bank can demand full repayment from either of them. The final distribution of the debt burden between the ex-spouses is then settled when the matrimonial property regime is liquidated.
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